Striking a New Bargain: Better Jobs for More Americans

Wright, Mark Lj, MinnPost.com

“The best anti-poverty program is a job,” goes the expression. And who could disagree? But Americans value employment for more than its ability to put food on the table. Most of us view jobs as a fundamental part of our identity — not simply a paycheck, but a source of pride and meaning.

President Bill Clinton recognized this. “Work is about more than making a living, as vital as that is,” he said. “It’s fundamental to human dignity, to our sense of self-worth.” Similarly, President Donald Trump observed, “There is dignity in every honest job … nobility in every honest worker.” And in Memphis, 50 years ago, the Rev. Martin Luther King Jr. spoke of the importance of every occupation. “No work is insignificant,” he told the city’s sanitation workers. “All labor that uplifts humanity has dignity and importance.”

The role of employment in alleviating poverty and generating self-worth was the theme of a conference recently convened by the Minneapolis Fed’s Opportunity and Inclusive Growth Institute. Participants discussed not only troubling employment trends but also their worrisome social consequences.

The historical 'grand bargain'

Harvard economist Jason Furman referred to a “grand bargain” long embraced by the United States. We unleashed free markets — accepting the inequality and insecurity they generate — in return for strong growth and healthy job markets. For decades this generated robust employment and rising wages.

But the bargain has recently been broken. Despite little regulation and high inequality levels, employment rates of prime-age women and men are now low by world standards. The problem for men is not new, particularly not for African-Americans. Unfortunately, female employment rates, previously globally-leading, have now stagnated. Many fear that new technologies and globalization will make these disparities worse.

Our scholars shed light on why labor markets have worsened, how we can improve them, and what the future has in store. They agreed that automation and trade with China have cost U.S. manufacturing jobs. But jobs in other sectors have also declined. Why so? And why have African-Americans suffered disproportionately?

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